es and Equities Computationes for issuing bonds and amortizing premium by straight-line methodey Corporation wholesales repair products to equipment manufacturers. On April 1, 20Y1, Smiley issued $6,400,000 of 4-year, 7% bonds at a market (effective) interest rate of 5%, receiving cash of $6,858,887.est is payable semiannually on April 1 and October 1.CashJournalize the entry to record the issuance of bonds on April 1, 20Y1. If an amount box does not require an entry, leave it blank.AccountCreditPremium on Bonds PayableBonds PayableInterest ExpensePremium on Bonds PayableCashFeedbackAccounteBookCheck My WorkThe market rate of interest is less thanCheck My WorkDebitJournalize the entry to record the first interest payment on October 1, 20Y1, and amortization of bond premium for 6 months, using the straight-line method. Round to the nearest dollar. If an amount box doesot require an entry, leave it blank.6,858,887006,400,000Debit Credit000Show Me How0000c. Why was the company able to issue the bonds for $6,858,887 rather than for the face amount of $6,400,000?the contract rate of interest.111Next >

Bonds are a source of funding. A bond issued by the company or the government to the public. The…

for issuing bonds and amortizing premium by straight-line method Corporation wholesales repair products to equipment manufacturers. On April 1, 20Y1, Smiley issued $6,400,000 of 4-year, 7% bonds at a market (effective) interest rate of 5%, receiving cash of $6,85 t is payable semiannually on April 1 and October 1. urnalize the entry to record the issuance of bonds on April 1, 20Y1. If an amount box does not require an entry, leave it blank. Account Credit sh emium on Bonds Payable Bonds Payable nterest Expense ✓ remium on Bonds Payable Cash Feedback Account Check My Work ournalize the entry to record the first interest payment on October 1, 20Y1, and amortization of bond premium for 6 months, using the straight-line method. Round to the nearest dollar. If an amount box require an entry, leave it blank. ✓ eck My Work Debit he market rate of interest is less than 6,858,887 0 0 0 6,400,000 Debit Credit Why was the company able to issue the bonds for $6,858,887 rather than for the face amount of $6,400,000? ✔ the contract rate of interest. Next

for issuing bonds and amortizing premium by straight-line method Corporation wholesales repair products to equipment manufacturers. On April 1, 20Y1, Smiley issued $6,400,000 of 4-year, 7% bonds at a market (effective) interest rate of 5%, receiving cash of $6,85 t is payable semiannually on April 1 and October 1. urnalize the entry to record the issuance of bonds on April 1, 20Y1. If an amount box does not require an entry, leave it blank. Account Credit sh emium on Bonds Payable Bonds Payable nterest Expense ✓ remium on Bonds Payable Cash Feedback Account Check My Work ournalize the entry to record the first interest payment on October 1, 20Y1, and amortization of bond premium for 6 months, using the straight-line method. Round to the nearest dollar. If an amount box require an entry, leave it blank. ✓ eck My Work Debit he market rate of interest is less than 6,858,887 0 0 0 6,400,000 Debit Credit Why was the company able to issue the bonds for $6,858,887 rather than for the face amount of $6,400,000? ✔ the contract rate of interest. Next

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On April 1, Year 1, Brandi Corporation issued $20,000,000 of 5-year, 9% bondsat a market interest rate of 8%, receiving cash of $20,811;010. Interest ispayable semiannually on April 1 and October 1. Journalize the entries to recordthe following:a. Issuance of the bonds on April 1, Year 1b. First interest payment on October 1, Year 1, and the amortization of bond premium for 2 months, using the straight-line method. how would I do part b since october 1 is 6 months away from april 1 but it says amortization of the bond premium for 2 months?
wholesales repair products to equipment manufacturers. On April 1, 20Y1, Smiley issued $6,400,000 of 4-year, 7% bonds at a market (effective) interest rate of 5%, receiving cash of $6,858,887. Interest is payable semiannually on April 1 and October 1. a. Journalize the entry to record the issuance of bonds on April 1, 20Y1. If an amount box does not require an entry, leave it blank. Debit Credit Cash Account Premium on Bonds Payable Bonds Payable Feedback Account 6,858,887 Interest Expense Premium on Bonds Payable Cash V 0 000 0 X V Check My Work Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. The straight-line method of amortization provides equal amounts of amortization over the life of the bond. ✓ b. Journalize the entry to record the first interest payment on October 1, 20Y1, and amortization of bond premium for 6 months, using the straight-line method. Round to the nearest dollar. If an amount box does…
Bond Premium, Entries for Bonds Payable Transactions Rodgers Corporation produces and sells football equipment. On July 1, 20Y1, Rodgers issued $77,800,000 of 10-year, 12% bonds at a market (effective) interest rate of 10%, receiving cash of $87,495,638. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: For all journal entries, if an amount box does not require an entry, leave it blank. 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1. fill in the blank 4ad6ca024fc305d_2 fill in the blank 4ad6ca024fc305d_3 fill in the blank 4ad6ca024fc305d_5 fill in the blank 4ad6ca024fc305d_6 fill in the blank 4ad6ca024fc305d_8 fill in the blank 4ad6ca024fc305d_9 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond…
Entries for Bonds Payable, including bond redemption The following transactions were completed by Montague Inc., whose fiscal year is the calendar year: 20Y1 July 1. Issued $55,000,000 of 10-year, 9% callable bonds dated July 1, 20Y1, at a market (effective) rate of 7%, receiving cash of $62,817,040. Interest is payable semiannually on December 31 and June 30. Dec. 31. Paid the semiannual interest on the bonds. The bond premium amortization of $390,852 is combined with the semiannual interest payment. 20Y2 June 30. Paid the semiannual interest on the bonds. The bond premium amortization of $390,852 is combined with the semiannual interest payment. Dec. 31. Paid the semiannual interest on the bonds. The bond premium amortization of $390,852 is combined with the semiannual interest payment. 20Y3 June 30. Recorded the redemption of the bonds, which were called at 103. The balance in the bond premium account is $6,253,632 after payment…
Issuing Bonds at Face Amount The first day of the fiscal year, a company issues a $700,000, 6%, 10-year bond that pays semiannual interest of $21,000 ($700,000 x 6% x 2 year), receiving cash of $700,000. a. Journalize the entry to record the issuance of the bonds. If an amount box does not require an entry, leave it blank. b. Journalize the entry to record the first interest payment. If an amount box does not require an entry, leave it blank. C. Journalize the entry to record the payment of the principal on the maturity date. If an amount box does not require an entry, leave it blank.
Bond Premium, Entries for Bonds Payable Transactions Instructions Present Value Tables Chart of Accounts Journal Final Questions Instructions O'Halloran Inc. produces and sells outdoor equipment. On July 1, Year 1, O'Halloran Inc. issued $32,000,000 of six-year, 8% bonds at a market (effective) interest rate of 7%, receiving cash of $33,546,022. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1.* 2. Journalize the entries to record the following:* a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar. b. The interest payment on June 30, Year 2, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar. 3. Determine the total interest…
Bond Premium; Bonds payable Transactions Beaufort Vaults Corporation produces and sells burial vaults. On July 1, 20Y3, Beaufort Vaults Corporation issued $25,000,000 of 10-year, 8% bonds at par. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Instructions: 1. Illustrate the effects of the issuance of the bonds on July 1, 20Y3, on the accounts and financial statements. If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts. Statement of Cash Flows Balance Sheet Assets = Liabilities + Stockholders' Equity Cash = Bonds payable + No effect July 1. fill in the blank 4 fill in the blank 5 fill in the blank 6 Statement of Cash Flows Income Statement Financing fill in the blank 8 No effect fill in the blank 10 2. Illustrate the…
On January 1, Year 1, Price Company issued $291,000 of five-year, 5 percent bonds at 98. Interest is payable annually on December 31. The discount is amortized using the straight-line method. Required Prepare the journal entries to record the bond transactions for Year 1 and Year 2. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 > Record the entry for issuance of bonds. Note: Enter debits before credits. Date General Journal Debit Credit Jan 01 Record entry Clear entry View general journal
On the first day of the fiscal year, a company issues a $621,000, 11%, 10-year bond that pays semiannual interest of $34,155 ($621,000 × 11% × 1/2), receiving cash of $652,050. Required: Journalize the entry to record the first interest payment and amortization of premium using the straight-line method. Refer to the Chart of Accounts for exact wording of account titles. Chart Of Accounts CHART OF ACCOUNTS General Ledger ASSETS 110 Cash 111 Petty Cash 112 Accounts Receivable 113 Allowance for Doubtful Accounts 114 Notes Receivable 115 Interest Receivable 121 Merchandise Inventory 122 Supplies 131 Prepaid Insurance 140 Land 151 Building 152 Accumulated Depreciation-Building 153 Equipment 154 Accumulated Depreciation-Equipment LIABILITIES 210 Accounts Payable 221 Salaries Payable 231 Sales Tax Payable 241 Notes Payable 242 Interest Payable 251 Bonds Payable 252 Discount on Bonds…
Entries for issuing bonds and amortizing premium by straight-line method Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, 20Y1, Smiley issued $20,000,000 of 5-year, 9% bonds at a market (effective) interest rate of 8%, receiving cash of $20,811,010. Interest is payable semiannually on April 1 and October 1. a. Journalize the entry to record the issuance of bonds on April 1, 20Y1. If an amount box does not require an entry, leave it blank. b. Journalize the entry to record the first interest payment on October 1, 20Y1, and amortization of bond premium for 6 months, using the straight-line method. If an amount box does not require an entry, leave it blank. c. Why was the company able to issue the bonds for $20,811,010 rather than for the face amount of $20,000,000? The market rate of interest is the contract rate of interest.